U.S. House rejects making charity tax breaks permanent

(Reuters) – The U.S. House of Representatives on Thursday rejected legislation to make three U.S. tax breaks for certain kinds of charitable donations permanent parts of the tax code, handing a defeat to the chamber’s top tax law writer.

Representative Dave Camp, the Republican chairman of the House Ways and Means Committee, proposed the bill at the 11th hour in the midst of Congress’ scramble to keep the federal government funded and open. Camp is set to retire within weeks.

The $11 billion bill dealt with tax breaks for donating property for conservation, for donating food inventories, and for making distributions from retirement plans to charities.

Camp called for making the trio of tax breaks permanent. At present, they are part of a package of dozens of temporary tax laws that Congress routinely renews every year or two.

By a vote of 275-149, the House declined to approve the bill, which failed to gain the two-thirds majority needed under an expedited voting procedure.

Democrats had criticized the bill because it offered no new sources of tax revenue to offset the drain on the federal budget that making the tax breaks permanent would impose. The White House had also expressed opposition to the measure.

The Republican-controlled House last week voted to renew all 55 of the temporary tax provisions, known as the extenders, postponing further debate on them until 2015. The Democratic-controlled Senate has not voted on the extenders renewal, but its approval was widely expected.

The renewal by the House of the extenders, most of which expired at the end of 2013, was retroactive to Jan. 1, 2014, meaning taxpayers could claim the tax breaks for the 2014 tax year, including the three charitable giving provisions.